Correlation Between Covivio Hotels and X Fab
Can any of the company-specific risk be diversified away by investing in both Covivio Hotels and X Fab at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Covivio Hotels and X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covivio Hotels and X Fab Silicon, you can compare the effects of market volatilities on Covivio Hotels and X Fab and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Covivio Hotels with a short position of X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covivio Hotels and X Fab.
Diversification Opportunities for Covivio Hotels and X Fab
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Covivio and XFAB is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Covivio Hotels and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon and Covivio Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Covivio Hotels are associated (or correlated) with X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Covivio Hotels i.e., Covivio Hotels and X Fab go up and down completely randomly.
Pair Corralation between Covivio Hotels and X Fab
Assuming the 90 days trading horizon Covivio Hotels is expected to generate 0.13 times more return on investment than X Fab. However, Covivio Hotels is 7.85 times less risky than X Fab. It trades about -0.28 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.11 per unit of risk. If you would invest 1,900 in Covivio Hotels on August 29, 2024 and sell it today you would lose (45.00) from holding Covivio Hotels or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covivio Hotels vs. X Fab Silicon
Performance |
| Timeline |
| Covivio Hotels |
| X Fab Silicon |
Covivio Hotels and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covivio Hotels and X Fab
The main advantage of trading using opposite Covivio Hotels and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio Hotels position performs unexpectedly, X Fab can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in X Fab will offset losses from the drop in X Fab's long position.| Covivio Hotels vs. Covivio SA | Covivio Hotels vs. Altarea SCA | Covivio Hotels vs. Icade SA | Covivio Hotels vs. Gecina SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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